Caroline Ellison, FTX trial witness, seeks leniency before sentencing

Caroline Ellison, a pivotal figure in the FTX trial, is asserting that she should receive no prison time for her involvement in one of the largest financial frauds ever recorded. Current indications suggest that federal prosecutors may be open to her request.

Ellison’s legal representatives have urged Judge Lewis Kaplan to consider a lenient sentence when she is due for sentencing on Tuesday afternoon. They emphasized that Ellison has openly accepted her wrongdoing, demonstrating a profound level of credibility as a cooperating witness against her former boyfriend, Sam Bankman-Fried, the former CEO of FTX.

During the trial that concluded with Bankman-Fried’s conviction on all seven charges, Ellison testified for three consecutive days. The charges included wire fraud and conspiracy to defraud FTX’s customers, as well as several counts related to securities and commodities fraud and money laundering.

Federal prosecutors acknowledged that Ellison’s cooperation was “extraordinary” and integral to the successful prosecution of Bankman-Fried. They highlighted that although she didn’t report any misconduct before FTX’s collapse, she did disclose significant facts to her employees shortly before the company declared bankruptcy on November 9, 2022. Prosecutor Danielle Sassoon noted in a letter to the judge that Ellison’s approach to cooperation was marked by honesty and a serious sense of remorse.

While prosecutors have not suggested a specific sentence, Ellison’s defense team has recommended a sentence aligned with the probation officials’ suggestion of time served, followed by three years of supervised release. Defense attorney Anjan Sahni contended that Ellison poses no risk of reoffending and should be treated leniently due to her sincere acknowledgment of her actions and extensive cooperation with authorities.

Sahni recounted Ellison’s complicated relationship with Bankman-Fried, which began in 2015 at Jane Street Capital. Initially an intern, she later moved to Hong Kong and then the Bahamas as directed by Bankman-Fried while often working demanding hours, influenced by the use of Adderall.

According to her defense, Ellison found herself in a tumultuous relationship with Bankman-Fried, recognizing its inherent inequality. Despite feeling unhappy and contemplating leaving her job at Alameda Research, she was persuaded by Bankman-Fried to stay, being told she was vital to the company’s success. Sahni’s letter highlights that this dynamic distorted Ellison’s moral judgment and contributed to her involvement in facilitating significant financial deception.

Bankman-Fried himself was sentenced to 25 years in prison in March. He has since initiated an appeal seeking to overturn his conviction.

Caroline Ellison’s case continues to unfold as various aspects of her testimony and cooperation come to light, raising questions about accountability, the complexities of personal relationships in high-stakes finance, and the legal process following such unprecedented fraud.

Source: ABC News